Three Mile Island faces premature retirement

30 May 2017

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The Three Mile Island nuclear power plant in Pennsylvania will be permanently shut down around the end of September 2019 if there are no policy reforms, US utility Exelon announced today. The company had warned last week the plant was at risk of early retirement.

Three Mile Island (Image: NRC)

Exelon announced on 24 May that its Three Mile Island (TMI) nuclear power plant and its Quad Cities plant in Illinois had failed to clear the latest PJM regional capacity auction. The TMI plant has not cleared the past three PJM auctions and has not been profitable in five years, it noted. While the continued operation of Quad Cities is ensured by newly-introduced legislation in Illinois, the TMI plant is "at risk of early retirement", Exelon said.

The utility announced today that it had decided to retire the plant, "absent needed policy reforms" in Pennsylvania.

Exelon said it is taking the first steps to shut down the plant, including informing key stakeholders. This, it said, includes sending regional transmission organisation PJM a deactivation notice and making permanent shutdown notifications to the Nuclear Regulatory Commission (NRC) within 30 days. It will also immediately take one-time charges of $65-$110 million for 2017 and accelerate some $1.0-$1.1 billion in depreciation and amortisation between now and the announced shutdown date. Exelon is also terminating capital investment programs required for the long-term operation of TMI and cancelling 2019 fuel purchases and outage planning.

Pennsylvania is home to nine nuclear power reactors that produce 93% of its carbon-free electricity, avoiding 37 million tonnes of carbon emissions. However, nuclear power is not included in Pennsylvania's Alternative Energy Portfolio Standard (AEPS). Sixteen other clean power sources - including solar, wind and hydro - are supported by this state energy policy.

"Amending the AEPS is one of many potential solutions to preserve Pennsylvania's nuclear plants. Other options include establishing a zero emissions credit program, similar to the approach being implemented in Illinois and New York," Exelon said. "Absent policy reforms, the loss of Pennsylvania's nuclear plants would increase air pollution, compromise the resiliency of the electric grid, raise energy prices for consumers, eliminate thousands of good-paying local jobs and weaken the state's economy."

Exelon president and CEO Chris Crane said: "Today is a difficult day, not just for the 675 talented men and women who have dedicated themselves to operating Three Mile Island safely and reliable every day, but also for their families, the communities and customers who depend on this plant to produce clean energy and support local jobs.

"Like New York and Illinois before it, the Commonwealth [of Pennsylvania] has an opportunity to take a leadership role in implementing a policy solution to preserve its nuclear energy facilities and the clean, reliable energy and good-paying jobs they provide."

Unit 1 of the Three Mile Island plant - which is built on an island in the Susquehanna River - began commercial operation in September 1974. It is a pressurized water reactor designed by Babcock and Wilcox. The unit is capable of generating 837 MWe (net), enough electricity to power over 800,000 average American homes. TMI 2 - owned by First Energy - was damaged during an accident in 1979 and never reopened.

In June 2016, Exelon announced it would move forward with the early retirements of two nuclear power plants in Illinois - Clinton and Quad Cities - due to a lack of progress on that state's energy policy. Earlier last year, Exelon announced that Clinton would close in June this year and Quad Cities next year, if the state did not pass legislation supporting their continued operation. However, in December, the state introduced energy legislation that will ensure the continued operation of the plants.

Last August, the New York Public Service Commission formally approved a Clean Energy Standard recognising the zero-carbon contribution of nuclear power plants and ensuring the continued operation of four that had been at risk of premature closure. This included the James A Fitzpatrick plant, which Exelon then agreed to buy from Entergy.

The short-term nature of deregulated electricity markets have left other US nuclear power plants at risk of premature closure for economic reasons, despite their long-term future and their potential contribution to achieving greenhouse gas emissions targets.